Dividend growth stocks allow investors to slowly and steadily build their wealth.
Betting on stocks with a strong track record of growing payouts has proven to be a tried-and-tested path toward long-term financial ease. Though high-yielding dividend stocks can be enticing, investors must focus on dividend growth. Firms that consistently raise dividends typically boast robust fundamentals marked by superb top-and-bottom-line growth. On top of that, growing dividends offer an effective shield against inflationary headwinds hield while allowing investors to enjoy compounded returns.
Without further ado, let us look at these three dividend growth stocks, which have an incredible track record of growing their dividend payouts. Each of these stocks has paid dividends for over a decade and consistently increased them for at least the past eight years. Therefore, there’s a lot to love about these dividend growth stocks, which offer an excellent path towards sustainable wealth building.
Dividend Growth Stocks To Buy: Archer-Daniels-Midland (ADM)
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Archer-Daniels-Midland’s (NYSE: ADM) bull case is a no-brainer.
It is the world’s largest agricultural processor and food ingredient provider. Given its positioning and recession-proof business, it has consistently delivered superb operating results. The steady demand for its products has also made ADM one of its niche’s most attractive dividend stocks.
It yields an excellent 3%, having grown its payout in the past 30 years. Overall, it has consistently paid dividends for the past 48 years, indicative of the robust health of its underlying business. Moreover, given its massive free cash flow base exceeding $4.7 billion, its dividend profile will continue moving from strength to strength.
Furthermore, ADM stock has been laggard over the past year, having shed more than 17% of its value. It trades at a compelling 0.36 times forward sales estimates, 71% lower than the sector median. Hence, it’s an excellent time to pounce on the stock at a sizeable bargain.
UnitedHealth Group (UNH)
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UnitedHealth Group (NYSE:UNH) offers the best of both worlds as a dividend growth stock. In addition to boosting dividend payouts, it has been an excellent wealth compounder, growing UNH stock by 115% over the past five years. Hence, investing in UNH stocks offers a robust combo of share price appreciation with healthy dividend income.
Like ADM, UNH also boasts a recession-resistant business model ensuring stable demand. Healthcare is critical; doctor visits, prescriptions, and emergency services are virtually impossible to avoid. Therefore the insurer will always be in demand, as shown by its rock-solid top-and-bottom-line performance. Revenue and EBITDA growth over the past five years has averaged a remarkable 10.4% and 13.7%, respectively.
More importantly, UNH yields an impressive 1.47% for its investors, having grown its payouts for the past 14 consecutive years. Also, its 5-year dividend growth rate stands at a compelling 15.41%.
Dick’s Sporting Goods (DKS)
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Dick’s Sporting Goods (NYSE:DKS)is one of the top plays in the athleisure space that continues to outperform its competition each year. Despite the slowdown in discretionary spending, its business has remained remarkably stable. Consequently, DKS stock is up north of 40% this year and continues posting strong operational results.
Moreover, its superb results have much to do with its effective omni-channel strategy, spurring growth across online and physical outlets. Dick’s most recent Q1 earnings report saw it comfortably outperform expectations, with its EPS jumping to $3.30 from an estimated $2.95 while revenues jumped to $3.02 billion, marking a 6% increase YOY.
Furthermore, the firm recently bumped its dividend by 10% earlier this year, taking its quarterly payout to $1.10 per share. That makes the company’s 9th consecutive year of payout expansion, exhibiting 33.54% dividend growth over the past five years. Hence, DICK’s Sporting Goods emerges as a compelling choice for investors looking for solid performance and steady growth in the retail sphere.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines